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Getting established as a translation agency
Thread poster: lapercha

lapercha  Identity Verified
Italy
Local time: 10:00
German to Italian
+ ...
Mar 11, 2013

Hi,

I'd need some tips about how to get established as an online translation intermediary.

I have been thinking about setting up a translation company and have my website almost ready, but when it comes to doubts concerning prices, terms and conditions and insurances I realize my little experience may not be sufficient.

First of all, I've seen that online translation agencies generally offer two or three kinds of service: a "professional translation", which includes proofreading, a "standard translation" and a post-edited machine translation. What I really can't explain to myself are the prices: I've seen quotations of 0,09€ per word including translation and proofreading service. What could be a standard price for proofreading?

My second doubt regards what to include in a possible contract with freelance translators. How should I protect my business and myself if the client doesn't pay the job, or if he/she complains about errors in the translated text? Should I specify in the contract that the company will pay the translator once the client has paid? What are the standard clauses of this type of contract?

Third: I know as a translation company I should get a insurance against possible errors, failures to meet the deadlines, etc.. Can you recommend a good insurance?

Any other tips or remarks are more than welcome.

Thanks,
Giovanna


 

Katalin Horváth McClure  Identity Verified
United States
Local time: 04:00
Member (2002)
English to Hungarian
+ ...
Experience Mar 11, 2013

Have you ever worked as a translator and/or a proofreader?

 

translate-24h
German to English
+ ...
some guidelines Mar 11, 2013

The price for proofreading is usually a third of what you would charge for a standard translation.
Translators should always be paid regardless of whether the client does - provided that the translator did a good job. Payment security is one of the reasons the translators collaborate with our agency. With regard to protecting your business: work out appropriate terms and conditions.

[Edited at 2013-03-11 13:10 GMT]

[Edited at 2013-03-11 13:10 GMT]


 

lapercha  Identity Verified
Italy
Local time: 10:00
German to Italian
+ ...
TOPIC STARTER
Experience Mar 11, 2013

I've worked as a translator, never as a proofreader...

 

Kitty Brussaard  Identity Verified
Netherlands
Local time: 10:00
Member (2009)
English to Dutch
+ ...
Risk is inherent to doing business Mar 11, 2013

translate-24 wrote:

Translators should always be paid regardless of whether the client does - provided that the translator did a good job. Payment security is one of the reasons the translators collaborate with our agency. With regard to protecting your business: work out appropriate terms and conditions.

[Edited at 2013-03-11 13:10 GMT]

[Edited at 2013-03-11 13:10 GMT]


I fully agree. You can't run a business without exposing yourself to a certain degree of risk. Your suppliers should be paid regardless of whether your clients meet their payment obligations (in time or at all). For this reason, you need to make sure that you have sufficient cash flow before you start outsourcing any work to freelance translators/proofreaders.


 

Katalin Horváth McClure  Identity Verified
United States
Local time: 04:00
Member (2002)
English to Hungarian
+ ...
The difference between agencies and brokers Mar 11, 2013

I wrote this on one of the forums a while ago, so instead of writing something similar here again, I post the link:
http://www.proz.com/forum/money_matters/186832-rates_pricing_how_much.html#1638811

You can find many interesting and relevant past discussions, for example this one:
http://www.proz.com/forum/translation_project_vendor_management/179735-translator_outsourced_job_to_a_colleague;_what_to_do.html


 

Marie-Helene Dubois  Identity Verified
Spain
Local time: 10:00
Member (2011)
Spanish to English
+ ...
Use the services of a professional Mar 11, 2013

I think that setting up a business requires skills, research and experience that are a little above simply asking for tips on a forum and that perhaps call for some professional help.

First of all, I'm not sure that it makes any business sense whatsoever to guess at prices with apparently very little experience in the industry. This requires thorough research. I very much doubt for instance that there would be any sense in a company offering a translation + proofreading service for €0.09 per word. Out of this, you need to pay the translator and the proofreader and retain some profit margin for yourself. How much exactly do you expect the translator to get out of this price? I don't think that this pie is big enough to be cut three ways. That to me makes common sense. It looks as though you need to write your business plan and do some more research on the subject.

Secondly, if you are serious about your business, you would need a lawyer to draft a contract. Any lawyer would be able to tell you that it is unlawful to make an agreement with a supplier that relies on a third party, who is not a party to the contract with said supplier, complying with their commitments to you.

And thirdly, managing deadlines is your responsibility as an agency. You have to factor this risk in to your business. The type of insurance you will need is PI (Professional Indemnity) which covers claims made against your company by a client for errors in a translation. However, if you're charging clients €0.09 for a translation plus proofreading, you are unlikely to have any room to incur any costs.


 

Woodstock  Identity Verified
Germany
Local time: 10:00
Member (2005)
German to English
+ ...
To me it sounds as if you are rather Mar 11, 2013

unprepared to make the transition to an agency. Long ago I made a similar mistake (in a different line of work) because my Italian boyfriend at the time was under the illusion (and I along with him) that he knew what he was doing. Ha. We ended up in a hole that took me a lot of hard work and effort to climb back out of. Needless to say, the relationship didn't survive that fiasco, and I learned a very tough lesson: Never walk into a situation without knowing exactly what you are doing, what the risks are, what your chances for success are, being very aware of your market and what the competition is doing, and being equipped and ready to spend time and money marketing your services.

Be very careful and avoid disappointment, or worse.

In any case, I wish you luck in whatever you decide.


 

Kevin Fulton  Identity Verified
United States
Local time: 04:00
German to English
Positioning Mar 11, 2013

I'm not aware of a shortage of translation agencies. Intense competition among agencies has forced already low prices even lower. Many people start agencies because they have a few direct clients and a list of colleagues they can potentially use. They learn the hard way that starting a business takes more than a web site and a Rolodex (not that anyone uses a Rolodex anymore, but you get the idea).

Please keep in mind that low barriers to entry = high risk of failure.

You need to consider where in the market you intend to position your company. That is, how to you intend to compete?
Specialty agencies providing high-end translations in a specific field, such as pharmaceuticals, tend to charge high prices and have higher margins. However, attracting these clients takes a lot of marketing expertise; paying translators who are experts can be expensive.

Do you plan to emphasize quality in a variety of fields? Again, you'll have to pay for talent, that is, charge high prices to pay for quality. You will have to work hard to maintain customer loyalty.

What services can you offer? Graphics? DTP? What is your competitive edge?

If you plan to emphasize low prices, then you'll have low margins and will have a hard time acquiring a talent pool of experienced -- and good -- translators. You'll get beginners, people performing translations for pocket money, people who think they can be a translator because they have a computer and an Internet connection.

Many, if not most buyers of low-cost translations have a low loyalty factor. They are buying on the basis of price. This means that you'll be forced to lower your prices to compete. You could easily be caught in a death spiral.

Do you have a business plan? Do you have resources/financing in place to pay your talent while waiting for your clients to pay? What about office staff? You'll need to have a full-time marketing person (who in theory could also work on accounts receivable) as well as a project manager. Who will be responsible for quality? Who will provide extra services? Who will perform backup if one of your process owners gets ill, has a baby or quits?


 

lapercha  Identity Verified
Italy
Local time: 10:00
German to Italian
+ ...
TOPIC STARTER
Experience Mar 11, 2013

Katalin, thanks for the links, they could be very helpful. What I had in mind was a real agency, with me and my partner performing the job of "managing and coordinating" rather than simply "connecting".

Marie-Helene and Woodstock: Thanks for your tips.The idea of setting up a business came unexpected: I was receiving assignments from clients asking for language combinations I couldn't support. Which means: I have been asking other people (colleagues, friends, etc) to take the job hoping that the same client would get back to me with other assignments.
Of course this is not enough to decide to set up a company. That's the reason why I'm writing here asking for tips, which is only the first step to have an idea of what I'll need to deal with.
Where am I supposed to get the "professional help" I need? Does proz.com offer this kind of consulting service? Can any of you recommend some useful links?

Thanks!


 

Woodstock  Identity Verified
Germany
Local time: 10:00
Member (2005)
German to English
+ ...
Loads of resources right here on this website Mar 11, 2013

lapercha wrote:
...
Where am I supposed to get the "professional help" I need? Does proz.com offer this kind of consulting service? Can any of you recommend some useful links?

Thanks!


You will find loads of very useful information right here at ProZ. Though I don't think they offer consulting services directly, I learned an awful lot right here, reading the fora on "Getting established", etc., reading articles: http://www.proz.com/translation-articles/, and in the meantime there are a large number of courses, webinars, etc., which were not available when I was starting out, here: http://www.proz.com/translator-training/topic/

I think if you just use Google, you will find a lot more information and faster than asking here, because once you start looking, the questions you need to ask will become clearer - hopefully.


 

Sheila Wilson  Identity Verified
Spain
Local time: 09:00
Member (2007)
English
+ ...
Professional help Mar 11, 2013

Woodstock wrote:
I think if you just use Google, you will find a lot more information and faster than asking here, because once you start looking, the questions you need to ask will become clearer - hopefully.

That's certainly a good start, you will certainly get a better idea of the questions that way. But I doubt that anyone should be setting up an agency without that professional help. Setting up as a freelance translator doesn't actually entail much of a risk financially, at least not in a lot of countries. You either make enough to survive, or you don't, in which case you give up and find a better way of earning a living. But an agency has lots of outgoings i.e. our invoices need to be paid, even if your clients don't pay you. So you aren't considering simply your own income, but ours too. You're also going to be liable for the quality of work over which you have no direct control. Once you start offering language pairs that you don't understand, you're going to be offering that work to translators without having the first idea of the quality of their work. That's a lot of risk you'll be undertaking.

Professional advice needs to come from lawyers specialising in business law; accountants specialising in SMEs (but also in exporting, which is what translators tend to do a lot more of than most SMEs); and organisations such as the Chamber of Commerce etc.

Just because some of us here (myself excluded) have set up agencies, does not make us expert enough to be able to give you the only advice you need before making such an important (and potentially catastrophic) decision. That's my opinion, anyway.


 

José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 05:00
English to Portuguese
+ ...
Look at it from all sides Mar 11, 2013

The key to any business is marketing. Why would anyone hire your agency instead of searching the web for a translator in the language pair they need?

I've put together some ideas to guide prospective translation clients upon making such a decision on this page.

Perhaps it will help you with some ideas on how to shape your business.


 

Van Lee Pereira  Identity Verified
Brazil
Local time: 05:00
English to Portuguese
+ ...
Price Mar 12, 2013

Usually, the price of a proofreading is the half of a standard translation. Some people charge an hour.

 

Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 10:00
Member (2005)
English to Spanish
+ ...
All so wrong! Mar 12, 2013

It puzzles me a bit that you have been a translator so far. To me, you are at big risk of falling into the same pitfalls I have seen others fall into over the years: you forget how badly you were treated by low-profile agencies... and are at the verge of creating one. But let me answer your main questions so that you can see why I say so.

lapercha wrote:
I've seen quotations of 0,09€ per word including translation and proofreading service. What could be a standard price for proofreading?

The key here is not what your standard price should be, but instead what your standard will be. The higher your quality standard, and hence the better your translators and proofreaders are, the higher the rate will be. By deciding your rate without considering the type of translators and proofreaders you want, you are cutting yourself out of the quality translation market. And may I say that there are already enough low-pay, low-quality agencies out there...

lapercha wrote:
How should I protect my business and myself if the client doesn't pay the job...

Have you ever been said that you cannot be paid until the end customer has paid? Didn't you find it outrageous? How come are you considering to do the same? The answer is simple in this case: the translator does not have a business relationship with the customer, so you have to pay no matter what the customer does. This is part of owning a company.

lapercha wrote:
...or if he/she complains about errors in the translated text?

Your contract with the translators should include a clause in the sense that the translator should amend the errors immediately at no cost. A procedure with an independent professional reviewer should be established to determine whether the customer is right in his/her assessment of the quality. These things are only a last resource in the case everything goes wrong, but your safety must be established much earlier: it would be your duty as an agency to actively find good translators with whom your risk is considerably lower. Carefully screening and testing your translators goes far beyond mining a pile of CVs or online profiles and requires a systematic, measured approach.

lapercha wrote:
Should I specify in the contract that the company will pay the translator once the client has paid?

Never.

lapercha wrote:
What are the standard clauses of this type of contract?

There is no standard. The best you can do is to hire a lawyer and decide the clauses with the lawyer. Now, you will have to remember that good translators will only work for you if your agreement makes professional sense. The more unreasonable clauses in your favour you add, the worse your translators will be, and your company can be ultimately doomed by low quality.

lapercha wrote:
Third: I know as a translation company I should get a insurance against possible errors, failures to meet the deadlines, etc.. Can you recommend a good insurance?

OK. If you get such an insurance, you should not expect translators to foot the bill in such situations.

lapercha wrote:
Any other tips or remarks are more than welcome.

My feeling is that, while your intentions may be good, you are not sufficiently experienced about the translation industry to start an agency. Sorry, I have to be blunt about this for your own good.


 
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